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Forests and climate

German activities

The Federal Ministry for Economic Cooperation and Development (BMZ) has long been committed to international forest protection and conservation and is among the world's largest donors in this field. It focuses in particular on strategies for combining forest conservation with sustainable forest use. This is because deforestation through logging and the overexploitation of natural resources is usually driven by economic factors. The only way to preserve forests in the long term is by finding other ways to use them, offering the rural population reasonable alternative ways to make a living and by getting the global agricultural industry involved in the process.

The BMZ is currently providing roughly two billion euros for more than 200 forest initiatives in more than 30 countries and ten regions, including programmes in the three major "green lungs" of our planet: the Amazon basin, the Congo basin and Indonesia. Support focuses on sustainable forest use that promotes climate change mitigation (Reducing Emissions from Deforestation and Forest Degradation, REDD+) and biodiversity conservation. The BMZ is also extending its activities to other strategic areas, for example restoring forest landscapes and establishing deforestation-free supply chains with a view to ensuring that no forests are destroyed for the cultivation of raw materials.

21.03.2011 - Animated film by BMZ about REDD (Reducing emissions from deforestation and degradation) – an innovative model to protect forest and climate.

REDD: Quite simply explainedCopyright

21.03.2011

Animated film by BMZ about REDD (Reducing emissions from deforestation and degradation) – an innovative model to protect forest and climate.

For some years now, the international community has been pursuing the REDD+ approach, which links forest and biodiversity conservation with climate change mitigation. REDD stands for Reducing Emissions from Deforestation and Forest Degradation. The principle behind REDD+ is that governments and local communities are rewarded for preventing deforestation and for verifiable emissions reductions. The REDD+ framework was negotiated over many years as part of the climate negotiations under the United Nations Framework Convention on Climate Change (UNFCCC) and reaffirmed in a separate article of the Paris climate agreement.

Afforestation and better forest management are also rewarded, because they improve the forest’s carbon storage function.

However, concrete proof of ecosystem services in the form of measurably reduced deforestation is required before any payments are made. This requires a monitoring and accounting system. Germany is helping many countries to introduce such a system, for example through the multilateral Forest Carbon Partnership Facility (FCPF). The BMZ is among the FCPF’s three largest donors. Of the total amount of 1.05 billion dollars committed so far, more than 200 million euros comes from the BMZ's budget and 10 million euros from the budget of the German Environment Ministry. The FCPF is helping almost 50 countries lay the foundations for REDD+. Through its Carbon Fund it can make payments for verified emissions reductions which are the result of prevented deforestation. It can also pave the way for possible REDD+ financing through the Green Climate Fund (GCF). In addition, the Facility operates as a learning platform and sets benchmarks for global quality standards for results-based financing.

In order to better achieve the goals regarding forest protection, Germany is cooperating closely with European governments and international partners. Cooperation with the Governments of Norway and the UK (Germany, Norway, United Kingdom, GNU) is particularly important in this context. The three governments are working together to deliver on their commitment made at the climate conference in Paris in December 2015 to provide 5 billion US dollars for REDD+ for the period 2015 to 2020.

Support for early movers

The German government is among the most important donors to REDD+ and has already invested well over five hundred million euros in relevant projects and programmes. For example, it is currently supporting bilateral projects in Brazil, Indonesia and Cameroon. Viet Nam is another country where Germany is engaged in development cooperation activities. Vietnamese farmers receive money for each hectare of forest that they replant or use sustainably; the money is paid into a "green" savings account. More than 100,000 families are participating in the programme and more than one hundred thousand hectares have now been reforested.

For pioneer countries, the BMZ has even refined and upgraded the REDD+ approach. Through the REDD Early Movers scheme (REM), it supports countries that are particularly active in sustainable forest conservation; it has so far provided almost 60 million euros from the BMZ budget for this purpose. The programme assists REDD+ pioneers that have already taken financial and political steps to link forest conservation and climate change mitigation. The programme is to be extended in the future to other countries, particularly in Latin America and Asia.

The REM scheme is one of the central programmes for the implementation of the GNU Initiative. For Colombia, for example, Norway and the United Kingdom have pledged about 120 million euros for results-based payments for REDD+. Twenty-eight million euros (with a German contribution of 6.5 million euros) have been disbursed already. By the end of 2019, the REM scheme will be supporting five or six country programmes. Thanks to Germany's involvement in the REM scheme, payments have been made for around 8 million tonnes of reduced CO2 emissions (as at April 2017). This corresponds to the annual emissions of more than 4 million cars in Germany. In the case of Mexico, BMZ will support the application of the REDD approach – both on the national and subnational level – with 25 million euros between 2018 and 2021.

Restoring forests

In addition to the conservation of existing forests, Forest Landscape Restoration (FLR), i.e. the rehabilitation of deforested or degraded forests and wooded, productive landscapes also plays a significant part in reducing global greenhouse gas emissions.

The African Forest Landscape Restoration Initiative (AFR100) was launched at the 2015 Paris Climate Conference by the BMZ, the African Union's development programme NEPAD (New Partnership for Africa’s Development), the World Bank and the World Resources Institute (WRI). Its goal is to restore some 100 million hectares of forest land in Africa by 2030. So far, 24 African countries have announced their intention to join the scheme: Ethiopia, Benin, Burundi, Côte d'Ivoire, Cameroon, Chad, the Democratic Republic of Congo, Ghana, Guinea, Kenya, Liberia, Madagascar, Malawi, Mozambique, Niger, the Republic of the Congo, Rwanda, Senegal, Sudan, South Africa, Tanzania, Togo, Uganda and the Central African Republic. Together they plan to restore more than 80 million hectares of forested land.

Germany is helping the AFR100 secretariat, for example, and a number of countries implement these ambitious goals. German development cooperation is also providing support to foster networking with potential investors and donors and exchange amongst the AFR100 partner countries.

The initiative is also supported by international donors such as the World Bank, private-sector companies and non-governmental organisations.

AFR100 ties in with important international agreements on the restoration of forest landscapes. In 2011, the international community pledged under the Bonn Challenge to restore 150 million hectares of degraded forest by 2020. In the New York Declaration on Forests of 2014 this figure was further increased: the current aim is to restore 350 million hectares of forest – an area almost the size of India – by 2030. It was also agreed in New York that global deforestation should be halved by 2020 and completely halted by 2030. The German government explicitly supports both agreements. The Federal Ministries for Development and for the Environment (BMZ and BMUB) are working hand in hand on these issues.

The Forest Landscape Restoration initiatives supported by the BMZ look at the whole landscape and how its resources can be used. The aim is to reconcile the goals of reforestation, food security and rural development. Partner governments receive support to help them establish reforestation goals in their national strategies and implement them across sectors. The BMZ is especially committed to ensuring that legal and institutional frameworks are improved and that the people living in and from the forests are involved in national planning processes. This will ensure that the measures taken have a sustainable impact.

Deforestation-free supply chains

Wood production is not the only driver of tropical deforestation; agricultural production is responsible for as much as 80 per cent of forest losses in the tropics. It is often overlooked that it is not only rain forests that are destroyed by agricultural activity; other forest eco systems, too, such as the dry forests and savannahs of South America are affected. The worst drivers of global deforestation are the agricultural production of palm oil, soy, beef and timber. But forests are also slashed to make room for cocoa, coffee, rubber and sugar cane plantations. These commodities reach Germany as raw materials or in the form of processed products via international supply chains. This shows that German consumers, too, have a responsibility vis-à-vis forests and the climate. This being so, the BMZ is committed to achieving deforestation-free supply chains. The aim of these efforts is to ensure that agricultural production does not harm or destroy entire forests or other valuable ecosystems in an area.

Actors need to put the frameworks in place along global supply chains to ensure that production processes are sustainable and deforestation free; they need to establish reliable traceability systems and verify forest protection in production regions by means of modern monitoring systems.

In recent years, international companies have increasingly committed to stop deforestation and make production deforestation free. The BMZ is supporting these activities at various levels.

In Germany and Europe, the BMZ provides consumers with information on deforestation-free supply chains.

The BMZ is working to bring about changes with a view to increasing the market share of sustainable and deforestation-free products in Germany, for example by working through multi-actor partnerships such as the German Initiative on Sustainable Cocoa or by firmly establishing sustainability standards in the EU's free trade agreements.

The BMZ is providing support in selected agricultural regions of Indonesia and Côte d'Ivoire to help make production in these regions sustainable and deforestation free. These "sustainable regions" must refrain from destroying forests for agricultural cultivation purposes, engage in the reafforestation of production areas in cooperation with the private sector and commit to making agricultural production processes transparent and traceable.

The aim is that, in the next few years, German companies with global operations will not only meet their sustainability obligations but will also ensure that the products they put on the German market originate from supply chains that are verifiably 100 per cent deforestation free.

Latin America

The tremendous biodiversity and wealth of natural resources in Latin America is more and more threatened by human activities such as slashing of forests for crops or for grazing land.

The financial sector can provide incentives for moving to a more ecological approach. This is the rationale behind the eco.business Fund, founded in late 2014 by KfW, the fund manager Finance-in-Motion and the NGO Conservation International on behalf of the BMZ. Because of the Fund's innovative structure, public funding can be used to dismantle market barriers and mobilise additional private funding for measures to conserve natural resources. The eco.business Fund enables companies and cooperatives in Latin America and the Caribbean to finance investments that contribute to conserving biodiversity or to using natural resources in a sustainable manner. In June 2016, KfW approved an equity capital investment in the Fund amounting to more than 22.2 million euros in order to meet the growing demand. Together, the fund manager and KfW succeeded in getting other investors on board, such as the Dutch FMO, the European Union, the ASN Bank and the GLS Bank.

The eco.business Fund assists companies in Latin America and in the Caribbean that engage in sustainable operations in entering new markets in Europe and the US. By 2019, 1.2 million hectares of ecologically valuable land are to be protected and used sustainably. In addition, 600 companies are to receive support so that 288,000 jobs can be created or maintained.

The example of Terrafertil

Terrafertil is a small enterprise from Ecuador which was set up by three brothers and their two cousins in 2015 and is now exporting worldwide. Their sustainable production has been awarded the Fairtrade label. Nine hundred producers in Ecuador and Colombia supply Terrafertil with Cape gooseberries, bananas, mangoes, pineapples and nuts. The company sells the produce as dried fruit, which means it can also process cosmetically imperfect fruit, thus tapping into a niche market. In the meantime, the company has opened a second factory in neighbouring Colombia. This example shows how financial funding from the eco.business Fund can help companies fully tap into their expansion potential.